If you were the victim of a lawsuit or the lucky winner of a large lottery payout, you are probably familiar with annuity payments and lump sum payments. You were probably given the option between the two, not quite sure which one was the best choice for you and your situation. Most payout companies will encourage monthly annuity payments, stating how you won?t run out of money that way and you will have a set source of income for many years. This is why most people choose the monthly annuity payments, but many later find out that they may have been able to do more with the lump sum payments.
The idea of a set amount of money every single month for life may be tempting, but what about the idea of being able to reduce debt, purchase a home or a car with cash or start your own business, which will produce its own income? These things may not be possible with structured monthly annuity payments, depending on the amount that you are receiving every month.
Additionally, receiving cash for an annuity may actually save you money and increase your monthly payments even further. If you are able to purchase a home with cash, you will reduce your amount of debt and you will avoid pricey interest charges. Considering that over 40% of US families spend more than they earn, you can be sure that you purchase a home that is affordable for you and your family. You can decide based on the amount of lump sum money you have, and not on the amount of monthly payments that you are receiving.
Receiving cash for an annuity is an opportunity to invest your money. It can be risky getting used to a specific monthly income for years. When the monthly payments stop, you will be struggling to find ways to get it back. You may not be able to work enough hours or make enough income to cover the loss of monthly income. If you receive cash for your structured settlement or lottery annuity, you can consider making an investment that will either permanently increase your monthly income or provide you with an investment that can be sold in the future. Additionally, owning a home or a car payment and interest free is also a great investment, opening up money should you need it in the future.
Consumers vastly underestimate or underreport how much debt they have. In fact, as of 2013, actual lender reported credit card debt was 155% greater than borrowed reported balances. People are embarrassed and weighed down by their debt. They may have alimony payments, mortgage payments or student loans. Medical debt is also a huge problem in the United States. Nearly 20% of credit reports are hurt by overdue medical bills. Receiving cash for an annuity or having the ability to invest your money for further income is a great way to pay down debt and ensure a better future for both you and your family.
Many Americans are struggling with different kinds of debt. High mortgages, medical debt, student loans and interest charges really affect Americans and can make them feel weighed down. If you are receiving monthly payments, this may not be enough to pay down debt and choose ways to increase your income. It can be risky to get used to a specific monthly income that may not be there forever. When you receive cash for an annuity, you can find ways to permanently increase your monthly income.